Most employers provide some employee benefits for their employees. The question is which benefits do they provide and is it sufficient coverage for you and your family? Will your employee benefits cover the financial disruption a disability or illness could cause? It is important to know the answers as you prepare to review and update your coverage in 2017. Whether your family is growing up and moving out, you’re adding to it, or you personally have some financial challenges headed your way, you need to be conducting an annual insurance review to make sure your coverage meets you and your family’s needs.
Because employers only offer insurance coverage up to a certain amount, you need to have individual plans for you and your family for coverage such as accident, disability, hospital indemnity and cancer insurance, just to name a few. These plans will be portable and stay with you whether you change jobs or move states, without a break or interruption in coverage. Here are five good reasons to consider personal insurance plans:
1) Individual insurance plans help protect your hard-earned savings.
No matter your stage in life, there’s already a lot to save for, including:
- College for yourself or children: Estimated average U.S. undergraduate college costs for four year institutions during the 2015-2016 school year, including tuition, fees, and room and board range from $19,548 to $43,921 according to College Board’s 2014 “Trends in College Pricing”.
- Down payment for a home: 20 percent of the home cost.
- Emergency fund: three to nine months living expenses.
- Retirement: eight times your salary level by age 67.
2) Unfortunately, pay raises aren’t keeping up with rising health care costs.
Perhaps you’ve been lucky enough to earn a pay increase this year. Still, health care costs increasingly take a larger share of one’s take-home pay. Even with slowing rate increases for health insurance premiums compared to 10 or 15 years ago, they continue to outpace inflation and wages according to the Henry J. Kaiser Foundation. “2015 Employer Health Benefits Survey.” Individual plans can provide coverage for additional health costs, living expenses such as rent or mortgage, and other costs not covered by your primary health plan.
3) Even with health insurance, potential out-of-pocket costs associated with illness or injury can be considerably high. For example:
- Out-of-pocket limits for 2016: Individual—$6,850; Family—$13,700. This is the most an individual or family will pay for covered essential health benefits before their plan begins to pay 100 percent of the costs.
- Cancer treatment: The average out-of-pocket cost among older cancer patients insured privately, through Medicare or both is $1,266 monthly according to Clear Health Care Costs. “By the numbers: Out-of-pocket costs for cancer treatment.”
- Hospital stay and related costs due to heart attack: Estimated cost is $21,500. Individuals with insurance can expect to be responsible for 10 to 20 percent or $2,150-$4,300according to Health cost helper. “Heart attack treatment cost.”
4) Many employees admit they aren’t prepared financially.
- Nearly 3 in 5 employees (59 percent) say they wouldn’t be able to adjust to the large financial costs associated with a serious injury or illness.
- 65 percent of employees have less than $1,000 to pay out-of-pocket expenses associated with an unexpected serious illness or accident that occurred today.
- 37 percent of employees would use a credit card to pay for out-of-pocket expenses associated with an unexpected serious illness or accident if it occurred today; 19 percent would borrow or withdraw money from their 401(k) or other retirement account.
5) Enhance your health insurance coverage.
Unlike employee health insurance, supplemental insurance policies pay the policyholder cash directly when they are sick or injured to help pay for unexpected out-of-pocket costs—for such things as hospital stays and cancer treatment. Since you choose how to spend your insurance claim, these policies give many individuals financial peace of mind. In fact, individuals enrolled are more likely to say they’re extremely or very prepared or satisfied according to a 2016 Aflac WorkForces Report.
- Prepared for unexpected out-of-pocket expenses not covered by major medical/health insurance (51 percent) compared to those who aren’t offered insurance by their employers (21 percent).
- Satisfied with their overall benefits packages (75 percent) compared to those who aren’t offered insurance by their employers (46 percent).
As you prepare for 2017, make it a priority to conduct your annual insurance review of current coverage while looking into new plans to be sure you’re fully covered if a serious illness, disability, or even worse should happen to you and your family. Regardless of your specific needs, maintaining policies to supplement what your employer provides can ensure you the right coverage.
College Board’s 2014. Trends in College Pricing. Accessed March 30, 2016.http://trends.collegeboard.org/sites/default/files/trends-college-pricing-web-final-508-2.pdf.
Henry J. Kaiser Foundation. “2015 Employer Health Benefits Survey.” Accessed March 3, 2016. http://k.org/report-section/ehbs-2015-summary-of-findings/.
Clear Health Care Costs. “By the numbers: Out-of-pocket costs for cancer treatment.” Accessed Feb. 11, 2016. http://clearhealthcosts.com/blog/2011/08/by-the-numbers-out-of-pocket-costs-for-cancer-treatment/.
Health cost helper. “Heart attack treatment cost.” Accessed on March 3, 2016. http://health.costhelper.com/heart-attack-treatment-cost.html#extres5.
2016 Aflac WorkForces Report. Accessed April 29, 2016. https://www.aflac.com/business/resources/aflac-workforces-report/default.aspx.